Top Security Tips to Protect Your Demat Account and Investments

It is common practice in the digital age to manage investments through a Demat account due to its simplicity and accessibility. However, electronic records and accounts are vulnerable to a completely different set of risks, such as phishing, malware, and password guessing, and investors must be aware of them and take the necessary precautions to avoid Demat account fraud. Here’s how you can protect your Demat account and investments:

1. Make use of Strong & Unique Passwords Why It Matters:

A strong password prevents anyone from logging into your Demat account without your permission.

What makes a strong password? It should be at least 12 characters long and contain a combination of upper and lower case letters, numbers, and symbols. You should also avoid including personal information in your password, such as your name, birthday, or address.

Create a unique password for each of your online accounts. This will help to keep all of your accounts from being compromised if one of your passwords is leaked.

2. Enable Two Factor Authentication (2FA) Why it matters:

This will avoid exposing your password to any individual, even members of your family or your close relatives. Also, do not input your login data on random devices or without encryption of the connection.

Last but not least, two-factor authentication should be switched on for your Demat account. This is because with two-factor authentication, you have to produce a code that is sent to your phone when providing your password to log into your account; hence, the probability of fraud is lowered.

3. Make sure that purchased shares are credited.

If you buy shares of any company on a particular day, they have to come to your Demat account the very next day. It is advisable to reach out to your broker in case of any delays 

4. Monitor account statements.

Keep an eye on your Demat account and bank statements to spot any unauthorized transactions or errors. This includes evaluating the messages sent to you by your bank or financial institution to ensure that the transactions on your account match. Report any issues, like incorrect balances or suspected fraud, to your broker right away for quick resolution

5. Enable SMS activity.

Allow SMS notifications from your broker and bank to improve security and track account activity. Create SMS alerts for balance updates, transactions, and security warnings. Monitor these SMS messages on a regular basis and take appropriate action to quickly detect and address any unauthorised or suspicious activity.

6. Freeze your account while traveling or during inactivity.

When you're traveling abroad or inactive for an extended period of time, freezing your bank account can help protect it from unauthorized activity. Before freezing your account, make sure you understand the process and any consequences, such as fees or access restrictions.

7. Select a reliable brokerage firm.

Conduct your own research before selecting a brokerage firm. Examine its reputation, track record, financial stability, and compliance with regulations. Find out what experiences others have had with that firm.